{"id":1004117850,"date":"2015-04-21T04:44:19","date_gmt":"2015-04-21T12:44:19","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004117850"},"modified":"2022-12-08T16:28:44","modified_gmt":"2022-12-09T00:28:44","slug":"prologis-ktr-deal-underlines-industrial-strength","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/prologis-ktr-deal-underlines-industrial-strength\/","title":{"rendered":"Prologis-KTR Deal Underlines Industrial Strength"},"content":{"rendered":"

By Scott Baltic, Contributing Editor<\/i><\/p>\n

\"Hamid<\/a>

Hamid Moghadam, Prologis<\/p><\/div>\n

The planned purchase of the real estate assets and operating platform of KTR Capital Partners and its affiliates for $5.9 billion by a joint venture of Prologis Inc. and Norges Bank Investment Management is a neon sign of bullishness in the industrial real estate sector, according to experts who spoke with Commercial Property Executive<\/i>.<\/p>\n

The acquisition, announced over the weekend, will encompass a 60 million-square-foot operating portfolio owned by KTR\u2019s three co-investment funds and comprising 322 properties, as well as 3.6 million square feet of developments underway and a land bank with a potential build-out of 6.8 million square feet.<\/p>\n

Part of the portfolio\u2019s appeal for Prologis reportedly is its approximately 95 percent overlap with the buyer\u2019s existing U.S. portfolio, which is heavily represented in Southern California, New Jersey, Chicago, South Florida, Seattle and Dallas.<\/p>\n

The portfolio\u2019s average occupancy is 89 percent and the average building age is 18 years, Tracy Ward, Prologis\u2019 senior VP of investor relations &corporate communications, told CPE<\/i>.<\/p>\n

The JV, called Prologis U.S. Logistics Venture, will be owned 55 percent by Prologis and 45 percent by NBIM, which manages the Norwegian Government Pension Fund Global.<\/p>\n

\u201cIt is rare to have the opportunity to acquire a portfolio of such high-asset quality, customer profile and market composition that is so consistent with our own,\u201d Prologis chairman & CEO Hamid Moghadam said in a release. \u201cI have known KTR\u2019s leadership for 15 years and have always considered them to be astute investors and one of our toughest competitors in the U.S.\u201d<\/p>\n

The deal is \u201ca significant statement about the strength of both organizations,\u201d about KTR\u2019s success with its funds, and about Prologis\u2019 long-term confidence in industrial space as an asset class, John Morris, Rosemont, Ill.\u2013based executive managing director and Head of Industrial Services, Americas for Cushman & Wakefield, told CPE<\/i>.<\/p>\n

The sector shows good prospects for development and absorption, even if the economy were to turn south again, he added.<\/p>\n

\u201cThe acquisition \u2026 is indicative of the current trend of institutionalization in the industrial real estate segment, as an expanding investor pool seeks to capitalize on the continued strength and growth of the current U.S. economic expansion,\u201d John Huguenard, international director with JLL\u2019s Capital Markets and leader of the firm\u2019s Industrial Capital Markets, told Commercial Property Executive<\/i>.<\/p>\n

\u201cAs funds that were able to aggregate at scale in primary and supporting markets during the global financial crisis now shop possible exit strategies, investors attracted to the tight fundamentals and increasing rental growth in the industrial segment are putting large premiums on portfolios that offer quality properties and scalability in key industrial markets, particularly assets that support high-growth industries like e-commerce,\u201d he continued.<\/p>\n

\u201cThe fact that new deliveries of industrial space hit 142.1 million square feet in 2014, well under the 2004\u201308 average of 184.0 million square feet, coupled with 19 straight quarters of positive net absorption, indicate that the current supply of industrial space is still extremely favorable for ownership, and investors are recognizing the growth potential of rents for industrial space,\u201d Huguenard concluded.<\/p>\n

Total consideration for the transaction, which is expected to close within 30 to 60 days, includes the assumption of about $700 million of secured mortgage debt and the issuance to KTR of up to $230 million (less assumed liabilities) of common limited partnership units in Prologis L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"

The experts have spoken: The planned purchase of KTR Capital Partners by a joint venture is a neon sign of bullishness in the industrial real estate sector.<\/p>\n","protected":false},"author":882,"featured_media":1004117854,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21748,21783,21742],"tags":[],"class_list":["post-1004117850","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industrial","category-investment","category-latest"],"acf":[],"yoast_head":"\nPrologis-KTR Deal Underlines Industrial Strength - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/prologis-ktr-deal-underlines-industrial-strength\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Prologis-KTR Deal Underlines Industrial Strength\" \/>\n<meta property=\"og:description\" content=\"The experts have spoken: The planned purchase of KTR Capital Partners by a joint venture is a neon sign of bullishness in the industrial real estate sector.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/prologis-ktr-deal-underlines-industrial-strength\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2015-04-21T12:44:19+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T00:28:44+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2015\/04\/Hamid-Moghadam-of-Prologis.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"378\" \/>\n\t<meta property=\"og:image:height\" content=\"336\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Scott Baltic\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/prologis-ktr-deal-underlines-industrial-strength\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/prologis-ktr-deal-underlines-industrial-strength\/\",\"name\":\"Prologis-KTR Deal Underlines Industrial Strength - 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